UAE Approves New Federal Law on Arbitration

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The UAE’s Federal National Council (FNC) approved the draft Arbitration bill this week. The FNC's approval of the draft Arbitration law, based on the UNCITRAL Model Law, evidences the UAE's ongoing commitment to being regarded as the international arbitration hub of choice in the Middle East.

Various drafts of the proposed federal arbitration law have been circulated by the UAE Ministry of Economy in the past, but, till now, have never been approved by the FNC. The lack of a stand-alone federal arbitration law has been one of the biggest challenges to arbitration in the UAE. Critically, the uncertain and often lengthy enforcement process has, at times, vexed the arbitration community and the various parties involved in the process. The new harmonized law is expected to further bolster confidence in the arbitration regime of the UAE and address the current ambiguities and risks that exist as a result of the absence of a more modern arbitration framework.

“The UAE’s Federal National Council’s approval of the draft Arbitration bill is a very welcome development and clearly evidences the UAE’s intention to remain at the forefront of dispute resolution in the region. Today’s business world is always evolving and an effective dispute resolution system is paramount to securing investor trust,” said Dr. Habib Al Mulla, Executive Chairman of Baker McKenzie Habib Al Mulla.

Andrew Mackenzie, the new Head of International Arbitration for the UAE, added, “The UAE has already demonstrated its ability to attract significant external investment. Enhancing the UAE’s arbitral landscape, thereby providing greater confidence in businesses’ ability to resolve disputes fairly and cost efficiently, will serve to further strengthen the UAE’s reputation as the number one destination of choice for investment in the Middle East and wider MENA region.”

Following the FNC’s approval, the bill is expected to pass into law later this year.

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